This High Speed Satellite Company Is Defying The Naysayers And Changing Everything

Ever since the Motorola Iridium bankruptcy in 1999, people have stigmatized satellite communications as impractical, flawed, and slow. This also explains why satellite communication technology has been innovatively sterile since then. The lone exception is a Carlsbad, California company that is quietly defying the naysayers.

ViaSat Inc. is a provider of high-speed satellite broadband services and secure networking systems, products and services. It serves both military and commercial markets – with an equal distribution of revenue between the two. They’ve quietly doubled their stock price in the last year, and I suspect given what I know now, that’s just the beginning.

Powered by the success of its ViaSat-1 satellite, CEO Mark Dankberg has become famous for betting the company on ViaSat-1 and winning. He's attracted a lot of respect from CEOs, competitors and Wall Street who doubted the company's ability to succeed - there are less doubters now.

So what does ViaSat's success reveal about the company and the commercial satellite industry? First, it's a powerful reminder, at a time when mobile wireless technologies are all the rage, that there is a huge opportunity for new business models to emerge around satellite communications. Since launching ViaSat-1, 600,000 people have signed up for their consumer service and when ViaSat-2 launches in 2016, several million more are expected to take advantage of it.

And according to Dankberg, that’s just the beginning. "We would really like to get to is the point where we can launch a satellite every year. Some of that has to do with satellite build and testing timelines(it takes a long time to build, test, and integrate satellite technologies), but one of the things we are finding is that that our growth rate is really a function of how much we market," ViaSat CEO Mark Dankberg told me.

But the company has throttled back its marketing due to the issue of balancing performance with usage. You can't just add a cell tower when you need additional bandwidth, you need to launch another satellite. According to Dankberg, that also explains why solutions like in-flight Wi-Fi can be so expensive: "Part of the reason they charge so much is to keep the usage down, because if a lot of people did use it, it wouldn’t work at all.”

Is High Speed Satellite Communication Limited in Upside?

Most people would assume that the bandwidth issues will forever limit the size of the satellite communications market, but I'd hold off on that assumption. Dankberg explained that current satellite systems are manufactured by different vendors that build to the lowest common technical denominator. The three primary components, the satellite, the ground systems and the satellite communications service providers are all different vendors with different priorities. Which means that the entire communication system is not optimized. These systems are like a large truck with a lawn mower engine meant for a race car driver.

"So what we’ve done is developed all three of those areas. We build the ground system, we design the satellites and we operate them, so we know what we need," Dankberg explained, "Since we are the architect of all three, we can completely integrate and optimize the system."

Dankberg told me that ViaSat-1 used existing space components, and sub-systems, but that ViaSat-2 will have a better design and thus optimized architecture. He believes it will be twice as fast as ViaSat-1 which means it will provide even greater competition with high speed cable and DSL providers.

That means anyone anywhere could have their own high speed communications antenna. Essentially filling the gaps that current providers can't fill due to regulatory or terrestrial issues. Yes satellite communication technology still operates on higher frequencies which don't propagate walls very well. But Dankberg says in those situations antennas on cars, busses, trains, homes and commercial buildings will convert the signal to lower frequency Wi-Fi which is better able to penetrate the interiors of buildings.

Has anyone noticed that when you need higher bandwidth the most, it never seems to be available? I'm thinking about those situations where streaming video, uploading and downloading media are essential but are slow due to network congestion. Dankberg’s solution was to develop a type of artificial intelligence: "One of the things we did to make our network faster is develop software to figure out what you are doing, and deliver it faster that you otherwise would get -because we can anticipate what you’re going to do," Dankberg said.

Future Revenue Streams

While satellite technology is clearly ViaSat's main concern, Dankberg was excited to show me technology that is limited by the gravitational forces of earth. You've seen the news trucks with big satellite dishes on top of them - they're needed to broadcast live video to a television audience. According to Dankberg, ViaSat has shrunk those dishes down to a size that will fit in a suitcase and can be set up in 10 minutes. That means users can broadcast and receive high bandwidth transmissions from virtually anywhere in the US.

While ViaSat only operates in the US and Canada today, one can imagine the international opportunities in third world countries with poor communications infrastructure. Delivering a high speed satellite connection to third world countries will literally lift people out of poverty as new opportunities to sell products, services or access to their own human resources will give them entry to global capital and to fulfill market needs.

It may take a few more satellites to provide reliable a scalable access to these countries, but if Dankberg's vision of releasing a satellite a year is realized, this will happen sooner than you think. Don't underestimate the potential.

Of course, third world dictators and democracies will continue to block access to their markets fearing security risks, but ViaSat sees a model where they partner with local companies to provide an entry point. I have no doubt that these countries will need to open up their markets or else they risk falling even further behind.

So without declaring it, ViaSat's CEO is understandably positive about their future. They are the communication pioneers of our day. But like all pioneers, a few missteps can significantly derail the business. Smart innovation matters, in other words, but so does performance.

So far, ViaSat has delivered both.

I provide an insider's view of the modern business world based on my years of experience working as an executive and consultant within the Global 3000. I am the CEO for Fanatics Media, a Digital Marketing Agency, and the author of Socialized!